Stonegate Capital Partners has updated its coverage on Valens Semiconductor Ltd. (NYSE:VLN) following the company's first quarter 2026 earnings report. Valens Semiconductor reported 1Q26 revenue of $16.9 million, compared to $19.4 million in the fourth quarter of 2025 and $16.8 million in the first quarter of 2025. While revenue stepped down sequentially after a stronger 4Q25, results were modestly ahead of expectations. GAAP gross margin reached 62.2%, above the company's guidance range of 57.0% to 59.0%. Adjusted EBITDA loss was $(5.5) million, better than the guided range of $(7.9) million to $(7.5) million.
Management reiterated full-year 2026 revenue guidance of $75.0 million to $77.0 million, which implies a significant acceleration in the second half of the year. According to Stonegate's analysis, the second half acceleration is the key thesis variable. Management expects a meaningfully stronger back half driven by sequential growth in the CIB (Commercial, Industrial, and Broadcasting) segment, momentum in ProAV (Professional Audio/Video), and design wins and design-ins converting into customer launches in the third and fourth quarters of 2026.
Automotive revenue grew to $5.9 million in the quarter, while the VA7000 chipset continues to gain traction in industrial machine vision and medical endoscopy applications. These adjacent markets expand the total addressable opportunity beyond core A-PHY automotive applications, though significant revenue contribution from VA7000 is likely several quarters out.
Stonegate noted that execution remains ahead of plan despite a slower first half setup. The company delivered gross margin of 62.2% above guidance and an adjusted EBITDA loss better than guided, while reiterating full-year revenue targets. Management noted that broader supply-chain conditions remain an area to monitor but stated that it does not see risk to meeting its full-year targets. The company views 2026 as a year of measured recovery and product-cycle execution, with near-term growth expected to build through the year.
The full announcement, including downloadable images and bios, is available at Stonegate Capital Partners.
